Experts Foresee Technology Impact on Tax Administration

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Emma Okonji

Citing a new study conducted by Deloitte on tax administration in Nigeria, experts have said technology will play a significant role on tax administration in the next five years.

In view of that, they urged the Federal Inland Revenue Service (FIRS) to carry out more digital-based reforms.

Head, International Tax, FIRS, Matthew Gbonjubola, noted that some progress had been made through digitalising significant aspect of tax administration in Nigeria.

For instance, primary tax legislations are being reviewed to have a single tax administration law.

He said the FIRS had also commenced the publishing of country-by-country regulation report as well as other tax guidelines that had helped to ease the problem of clarity around tax administration in the country.

According to him, “We are modernising and introducing technology in tax reforms to plug revenue leakages.”
However, some stakeholders believe the tax regulator is not doing enough to reduce the challenges companies face with regards to compliance. Hence, automating every step in the tax process could go a long way in removing the bottlenecks.

Automation is also seen as the way forward for companies that intend to efficiently plug every leakage.
Also, the Partner and West Africa Tax Leader at Deloitte, Yomi Olugbenro, said: “With the increasing regulatory environment, penalties are going to be a given, hence, companies cannot be looking at making money and allowing leakages.

“They need to leverage technology because that is the only way you can be accurate and avoid time wasting.”
The Digital Leader, Africa Tax and Legal at Deloitte, Mark Freer, highlighted five digital trends that would define the future of tax and the legal profession.

“There is big data as organisations and authorities begin to critically analyse the data in their possession and to leverage the insights for better tax services.

“Second, is the process automation which requires robotic automation and integration of financial and other systems.

“Third is decision making, as artificial intelligence in integrated in compliance and consulting capabilities.”
The fourth trend, according to him, was democratisation of knowledge, saying more people are gaining access to large information as result of the different new channels that now exist.

The fifth trend, Freer highlighted, was open networks which speak to talent sourcing, crowd problem-solving and sharing ecosystems.

“Tax teams are no longer entirely based on traditional or full-time employees.

“However, crowdsourcing or open talent models in the tax and legal market seem further off when compared to the use of IT graphic design and finance,” Freer said.

Olugbenro further explained that the chief tax officer should be part of the conversation of tax reforms at the highest level, insisting that it is important that conversation also get more strategic, beyond just filing tax returns.